The Verge, The Information and The Financial Times reported that Fitbit is set to acquire Pebble for a small amount. The deal would allow Fitbit to take Pebble’s intellectual property, including its operating system.
Why Pebble Is Selling Itself?
Pebble is a big name in the smartwatch department. In fact, it has boasted big Kickstarter campaigns. However, it is not raking in cash. The sales of its smartwatches are nowhere near the sales numbers of Fitbit and other smartwatches.
Last year, it was estimated that 8.6 percent of the smartwatch market came from Pebble. But this share fell to 3.2 percent while Samsung and Garmin shares are increasing as regards to OS penetration.
Then, in March, Eric Migicovsky, CEO of Pebble, said that he is going to lay off 40 members of his staff or 25 percent of the company’s workforce. So it just makes sense that Fitbit would like to acquire it.
Fitbit did not reveal a new flagship at CES in January. Instead, it presented Fitbit Blaze, a smart fitness watch. It has characteristics of Charge HR and the Surge. Without standout features, Fitbit sales fell.
After the Las Vegas launch event, its stock dropped to 18 percent before it hit $18.50 a few days after. It is probably because people want the killer features of Apple Watch. Unfortunately, Fitbit failed to give its audience excellent features. Instead, it provided them with a basic fitness tracker. The only difference is that the Blaze has a huge screen.
If Fitbit would acquire Pebble, it might get a huge share in the smartwatch ecosystem. Over the last few years, Pebble built a huge audience. Plus, it has more than 13,000 apps available for the platform. In May, the company launched three new devices.
Furthermore, when Fitbit buys Pebble, it can get its hands on the company’s expertise in building smartwatches with rich features and creating health and fitness platform. Although Pebble has developed unique products, it could not prevent itself from facing money problems.
Will Pebble’s Devices Be Phased Out?
Since Fitbit is purchasing the company to access its technologies and IPs, Pebble’s devices might be removed.
It was reported in the past that Pebble received various offers. Citizen, for example, offered the company $740 million. Unfortunately, Pebble refused it. After its poor performance, Intel offered another deal to Pebble for $70 million. That is, it should stop launching its Pebble 2 and Pebble Time 2 campaign on Kickstarter. This deal, too, was rejected.
Fitbit And Class-Action Suit
In January, Fitbit was hit with a lawsuit after it unveiled its latest fitness watch. Consumers from Colorado, California, and Wisconsin said that the HR tracking of Charge HR and Surge did not provide accurate reading by a significant margin. They further added that the HR tracking of Fitbit does not actually count each beat.
Fitbit and Pebble have not released statements yet regarding this report. But the deal is still in the works, according to The Verge. So, we wait and see what will happen.